Covid and surplus savings: the 5 favourite investments of the French

Since the start of the health crisis, households have been saving more than usual. According to the Banque de France, this savings surplus approached 200 billion euros at the end of December. What are the top 5 products used by the French to invest these savings?

Regulated savings books

The Livret A remains the preferred savings product of the French, who also appreciate the security and flexibility of the Livret de développement durable et solidaire. These two passbooks have been the main products to capture surplus household savings since the start of the health crisis, with €35 billion collected in 2020, more than double the amount collected in 2019.

Since the start of 2021, the French have invested more than 20.64 billion euros in their Livrets A and Livrets de développement durable et solidaire.

Current account deposits

Most of the surplus savings were simply placed in French household current accounts, with sight deposits up 24% between the end of 2019 and July 2021, amounting to 100 billion euros.

At a time of economic crisis, the French want to be cautious in an uncertain environment, by saving while still being able to access this money immediately in the event of a hard blow.

In 2021, sight deposits remain very high despite the economic recovery. The first two quarters of the year saw positive flows of $17.4 billion and $21.2 billion, confirming that the French savings surplus has not yet been used up.

Life insurance

In 2020, the closure of bank branches, insurance companies and other distributors during periods of confinement was hardly conducive to the vitality of life insurance.

In 2021, however, the trend is upwards, with more than 20 billion euros collected by the end of the 2nd quarter, i.e. more in 6 months than in the whole of 2020, when collections totalled 15 billion euros.

Inflows to unit-linked products are higher than those to guaranteed euro fund products, which are more costly for insurers and therefore less promoted.

Stock market investments

Contrary to expectations in these uncertain times, many French people have taken an interest in stock market investments since the start of the health crisis. As early as April 2020, there were 150,000 new individual investors since the end of February, as noted by the Autorité des marchés financiers.

At the end of Q1 2021, the AMF noted an acceleration in the trend, with a total of 772,000 retail investors, compared with 580,000 at the end of Q1 2020. Now, retail investors seem to be moving away from the stock market once again: in Q2 2021, the AMF recorded 13.31 million transactions by 753,000 retail investors, a drop of 25%.

Real estate investments

The government tried to convince the French to spend their savings to boost consumption and support the economic recovery.

While these various appeals did not have the desired effect, many households did invest in real estate, which only really suffered the consequences of the health crisis during the 1st containment, between March and May 2020.

According to Banque de France figures, home loan production reached 24.5 billion euros in October 2021. The annual growth rate of outstanding loans, at 6.4%, is considered high by the institution. In September, the rate was 6.6%, with new loans totalling 23 billion euros.

This very high level is made possible by the persistently low interest rate environment, with an average interest rate of 1.13% in October for new loans, barely above the lowest level (1.12%) ever recorded by the Banque de France.